As a business owner, it’s important to understand all of the expenses that come with running a company. One of these expenses that often gets overlooked is void business rates, also known as empty property rates. In this article, we will delve into what void business rates are, why they exist, and how they can impact your business.
What are void business rates?
void business rates are taxes that need to be paid on empty commercial properties. In the UK, if a property is unoccupied for an extended period of time, the local council can charge business rates on the property, even if it is not generating any income. These rates are in addition to any standard business rates that may need to be paid when the property is being used for business activities.
Why do void business rates exist?
The concept of void business rates exists to prevent property owners from leaving their properties unoccupied for extended periods of time. By imposing these rates, the government aims to discourage property owners from holding onto empty properties as a form of investment, while also generating revenue for local councils.
In theory, void business rates are supposed to incentivize property owners to make their properties available for use, whether by renting them out or selling them to someone who can utilize them. However, in practice, these rates can be a burden for businesses, especially during times of economic downturn or when there is a slow market for commercial properties.
How can void business rates impact your business?
If you own a commercial property that is currently vacant, you may be subject to void business rates. These rates can add significant costs to your overhead expenses, which can be especially challenging if your business is already struggling financially. Paying void business rates on top of standard business rates can eat into your profits and make it harder to keep your business afloat.
In addition, void business rates can deter property owners from investing in new properties or expanding their existing ones. The fear of being hit with hefty rates on an empty property can make property owners think twice before making any investments, which can ultimately stagnate economic growth in certain areas.
What can you do to mitigate void business rates?
If you find yourself in a situation where you are being charged void business rates on an empty property, there are a few options available to help mitigate the impact of these rates on your business. One option is to actively market the property for rent or sale to try to find a tenant or buyer as quickly as possible. By having a tenant or owner in place, you can avoid paying void business rates altogether.
Another option is to apply for an exemption or reduction in void business rates. In some cases, property owners may be eligible for relief on empty property rates if they can demonstrate that they are actively trying to find a tenant or buyer for the property. It’s worth exploring these options with your local council to see if you qualify for any relief or exemptions.
Overall, void business rates are an additional cost that business owners need to be aware of when it comes to managing their properties. By understanding what void business rates are, why they exist, and how they can impact your business, you can better navigate the challenges that come with owning and operating commercial properties.